A healthy attitude to money: pay tax with pride

A healthy attitude to money: pay tax with pride

By
Jennifer Cunningham

Until the financial crash of 2008, news that a rogue trader had allegedly lost Swiss investment banking giant UBS £1.5 billion would have been greeted with shock, swiftly followed by fascination as to how it happened.

Now, having bailed out high street banks, the taxpayers’ reaction to Kweku Adoboli’s £1.5bn failed gamble is anger that 16 years after Nick Leeson broke Barings Bank, the management of investment banks still does not know what is going on at the sharp end and that the Government is showing a lack of urgency in implementing the recommendations of the Vickers Commission to ringfence retail banking.

This should be the season of big ideas from the party conferences but Right and Left continue to chuck their contradictory cut/spend remedies from the policy silos.

The insistence by Chancellor George Osborne that we are all in financial straits together while cuts to public services cause problems to families struggling against rising prices serves only to deepen the cynicism that encourages tax avoidance.

The campaign to persuade the Chancellor to reduce the top rate of income tax below 50p for those earning over £150,000 a year is a further barb to those whose hours have been reduced or who fear they might lose their jobs. Step forward three people from Bishopbriggs. John Harvey, Iain Johnston and Muriel Pearson argue that all tax payments should be viewed as a positive contribution to a shared society. They have thrown down the gauntlet to the people of Scotland to make a public commitment to our much-vaunted communitarian values by submitting a petition to the Scottish Parliament calling for income tax to be officially termed social investment payment (http://epetitions.direct.gov.uk/petitions/16382). The prospect of people rushing to pay their taxes in anticipation of a warm glow of satisfaction is beguiling but distinctly at odds with the frenzy of greed we saw on the streets of English cities this summer.

By contrast with the view of the highest-rate British taxpayers that the 50p rate is a disincentive to work that damages the economy, our wealthy European neighbours recognise the need for the rich to demonstrate solidarity by paying more into the public purse. Rich individuals have been spurred into action following the announcement by Warren Buffett in the US that he and his wealthy friends have been “coddled long enough by a billionaire-friendly Congress”. In Germany 50 people, most of whom have inherited wealth but are not in the billionaire class, have formed a group calling for a 5% levy on capital over 500,000 euros to ease the financial crisis. In France 16 billionaires have asked to make a special contribution to help drag France out of the financial crisis and President Nicolas Sarkozy has proposed a temporary “exceptional contribution” of 3% on taxable earnings for those earning above 500,000 euros. The Spanish government is considering the reintroduction of a wealth tax scrapped three years ago and in Italy the head of the main business association, Emma Marcegaglia, has said she is open to raising taxes on wealth alongside broader fiscal reforms.

In Britain by contrast, the highest-paid bankers are still jealously clutching their bonuses like Gollum guarding the ring. It wasn’t the actions of rogue traders that ripped apart the global economy but a culture that emphasised the need to make money without thought for the consequences. That has spread disastrously through society. More than 3.8 million UK children live in poverty and, as a Unicef report last week showed, children in Britain are more unhappy than those in many other developed countries mainly because their parents work such long hours.

Paying your taxes with pride is not an instant remedy for the increase in eating disorders and depression in ever-younger age groups that are the most serious manifestations of this misery, but it is a step towards a culture change that values the social fabric of the country as highly as the bricks and mortar which has proved such an illusory definition of success.

There is a long way to go, when the Chief Secretary to the Treasury offers 2000 extra tax inspectors instead of 2000 more teachers as political lollipop.

Comments & Moderation

Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.

This website and associated newspapers adhere to the Independent Press Standards Organisation's Editors' Code of Practice. If you have a complaint about the editorial content which relates to inaccuracy or intrusion, then please contact the editor here. If you are dissatisfied with the response provided you can contact IPSO here